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Pine Corporation has debt with both a face and a market value of $1,540,000. This debt...

Pine Corporation has debt with both a face and a market value of $1,540,000. This debt has a coupon rate of 6 percent and pays interest annually. The expected earnings before interest and taxes are $830,000, the tax rate is 25 percent, and the unlevered cost of capital is 10.4 percent. What is the firm's cost of equity?

11.45%

11.73%

11.92%

12.03%

12.21%
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